The benevolence of the butcher, the brewer or the baker: The
politics of happiness

By David Wearing, Le Monde diplomatique, July
2006

The Conservative party leader, David Cameron, made waves in
the United Kingdom with his new focus on happiness. Should government
concentrate on economic growth as an end in itself or should it also
consider whether it is making people happier?

Professor Andrew Oswald (1), an economist at Warwick University who
worked for years on the importance of happiness, is suddenly popular
amongst journalists and politicians. There is also, he says,
“some interest from the current government. The Labour party has
released a document on life satisfaction in the UK, which talked a lot
about our work here at Warwick.” He cites research showing that
“happiness levels have remained flat, while incomes have been
rising sharply. In other words, although the majority of people within
western societies have become infinitely richer over time, we
haven’t become any happier.”

What does Oswald think these findings imply for the idea that
self-interest is the prime motivating factor in human behaviour? We
are often told that human beings need the incentive of material reward
as a spur to hard work. In fact, much of the politicians' faith in
the market system is based on their conception of how people seek to
maximise material gain for themselves within that system. In the words
of the celebrated 18th century economist Adam Smith: “It is not
from the benevolence of the butcher, the brewer, or the baker, that we
can expect our dinner, but from their regard to their own
interest” (2).

But the more you read Adam Smith, the less you believe in the popular
understanding of his ideas. On self-interest, he said: “How
selfish soever man may be supposed, there are evidently some
principles in his nature which interest him in the fortune of others
and render their happiness necessary to him though he derives nothing
from it except the pleasure of seeing it.” But the idea that
seems to have taken hold among apologists for capitalism's many
failures is that human beings are more or less purely motivated by
self-interest—and specifically by the drive for personal material
gain.

This seems a narrow understanding of the human psyche. Do parents care
for their children because they expect some material reward? As Adam
Smith says, it is evident that selflessness and empathy play their
part in influencing human behaviour as well, along with myriad other
factors. Self-interest—or greed—routinely, often
catastrophically (3), collides with the common interest; the
accentuation of this particular and least endearing of human qualities
is bound to have a corrosive effect on society.

The problem Oswald poses is that material gain only serves
self-interest to a limited degree. So even if a mechanism in which
everyone acted purely in their own interests would ultimately benefit
the common good, it does not appear certain that a mechanism for
distributing material reward would necessarily be the ideal one to
use.

‘How selfish soever man may be’

How do these notions of self-interest, material rewards and incentives
manifest themselves in politics? We are told that raising income tax
for the wealthiest would remove the material incentives that they
require in order to best perform their productive role in society. But
we hear less of this point when discussing the incomes of the less
well off. Apparently the non-wealthy do not require the incentive of
ever-greater material rewards in order to properly play their part in
the market economy. The poorer you are the higher proportion of your
income is taxed. The British Chancellor of the Exchequer, Gordon
Brown, has called for a public sector pay freeze in order to maintain
“vigilance in the fight against inflation” (4). This brave
stance apparently need not be taken on pay for top private sector
executives, which rose by an average of 16.1% in 2004—four times
faster than average earnings and eight times (5) the rate of
inflation.

Where does the new interest in happiness fit in to all this? If, as
Professor Oswald says, people's general state of happiness may
level off even as their income rises, then how efficient is it to use
vast material rewards to incentivise those on six-, seven- or
eight-figure incomes? Wouldn’t it be more productive to
redistribute these resources amongst those who earn far, far less?
After all, there are only so many luxury yachts that one person can
realistically make good use of. So should it not be those at the
bottom of the income scale, rather than those at the top, whose
incentives we primarily concern ourselves with?

Gordon Brown doesn’t think so, and neither does the number two
to the new British Conservative leader, David Cameron. The shadow
chancellor, George Osborne (6), set out to win the hearts of the
business community, proffering policies starkly at odds with the
current popular image of a new, revolutionary, almost centre-left Tory
party. Whilst Cameron tells the rest of us that money isn’t
everything, Osborne promised yet lower corporation tax (in spite of
the fact that corporate tax avoidance is estimated to cost those of us
who pay our taxes Â£100bn (7) each year). He promised the City
“simpler taxation, the right regulations and better
infrastructure” and made clear that by “simpler
taxation” he meant less (or less of the fraction that is
actually being paid); and that by the “right regulations”
he meant reducing yet further the accountability of profit-making
organisations to the democratic will of society. As for better
infrastructure, it seems that the state has its uses after all,
although in terms of accountability, or of paying its fair share for
this assistance, reciprocity will be in short supply.

Osborne's admission of who is in charge of this policy agenda is
almost superfluous: “Major companies can pack up and move
anywhere in the world if faced with damaging regulations”
— in other words, if governments do not govern in their
interests. Nurses, teachers, firefighters and others do not have that
power over governments. This fundamental tension between capitalism
and democracy renders theoretical discussion of incentives and free
markets of secondary relevance.

For all the talk of a move in British politics to concern for
people's wellbeing, materialism remains the enduring concern. As
long as the global economy is dominated by large private organisations
legally obliged to maximise profit to the exclusion of other concerns,
rhetorical flourishes such as the current discussion of happiness
should be understood as little more than attempts to rebrand the
groups of manager-politicians who formulate policy, either actively to
serve those interests or at least not to conflict with them.

The themes adopted in these slick, carefully planned advertising
campaigns are, however, of note: compassion for others, concern for
the environment, human rights and democracy abroad. They show that
those tasked with understanding the public mind realise that people
are not primarily, let alone exclusively, concerned with greed,
competition or narrow self-interest. The sharp difference between
public policy (and the interests it serves) and the assessment of
human nature made by those employed to understand it shows that a new
social and economic and political settlement, in which public policy
reflects the interests of the public, is still a realisable goal. And
it is feared by those in power.